SOURCE: AXT, Inc.

AXT, Inc.

February 25, 2013 16:10 ET

AXT, Inc. Announces Fourth Quarter and Fiscal 2012 Financial Results

FREMONT, CA--(Marketwire - Feb 25, 2013) - AXT, Inc. (NASDAQ: AXTI)

  • FY 2012 Net Revenues: $88.4 million

  • FY 2012 GAAP Net Income: $3.1 million; $0.09 per share (diluted)

AXT, Inc. (NASDAQ: AXTI), a leading manufacturer of compound semiconductor substrates, today reported financial results for the fourth quarter and fiscal year ended December 31, 2012.

Fourth Quarter 2012 Results
Revenue for the fourth quarter of 2012 was $18.9 million compared with $20.8 million in the third quarter of 2012. Total gallium arsenide (GaAs) substrate revenue was $11.3 million for the fourth quarter of 2012, compared with $12.9 million in the third quarter of 2012. Indium phosphide (InP) substrate revenue was $1.6 million for the fourth quarter of 2012, compared with $1.6 million in the third quarter of 2012. Germanium (Ge) substrate revenue was $1.7 million for the fourth quarter of 2012 compared with $2.0 million in the third quarter of 2012. Raw materials sales were $4.3 million for the fourth quarter of 2012, compared with $4.3 million in the third quarter of 2012.

Gross margin was 19.5 percent of revenue for the fourth quarter of 2012. By comparison, gross margin in the third quarter of 2012 was 26.3 percent of revenue.

Operating expenses were $4.6 million in the fourth quarter of 2012, compared with $4.8 million in the third quarter of 2012.

Loss from operations for the fourth quarter of 2012 was $0.9 million compared with income from operations of $0.7 million in the third quarter of 2012. 

Net interest and other income for the fourth quarter of 2012 was $522,000, which included a foreign exchange loss of $499,000. This compares with net interest and other income of $544,000 in the third quarter of 2012, which included a foreign exchange gain of $114,000.

Net loss in the fourth quarter of 2012 was $0.8 million or $0.02 per diluted share compared with net income of $0.9 million or $0.03 per diluted share in the third quarter of 2012. 

Fiscal 2012 Results
For the fiscal year 2012, revenue was $88.4 million, a 15 percent decrease from $104.1 million in fiscal year 2011. Gross margin for fiscal year 2012 was 28.1 percent of revenue compared with 43.0 percent of revenue for fiscal year 2011.

Net income for fiscal year 2012 was $3.1 million or $0.09 per diluted share compared with net income of $20.3 million or $0.61 per diluted share for fiscal year 2011.

Management Qualitative Comments
"While we are coming off of a tough year in our industry, we believe that we have been able to weather the environment reasonably well, remaining profitable for the year and generating nearly $10 million in cash," said Morris Young, chief executive officer. "As we enter 2013, we are seeing signs of market improvement in several of our product categories and believe that the current customer landscape holds interesting opportunity for AXT. We are approaching the year with cautious optimism and will continue to exercise tight expense control and careful financial planning. We believe that AXT is a strong competitor and we are focused on delivering growth and shareholder value in 2013."

Conference Call
The company will also host a conference call to discuss these results on February 25, 2013 at 1:30 p.m. PST. The conference call can be accessed at (719) 325-2215 (passcode 3780034). The call will also be simulcast on the Internet at www.axt.com. Replays will be available at (719) 457-0820 (passcode 3780034) until March 3, 2013. Financial and statistical information to be discussed in the call will be available on the company's website immediately prior to commencement of the call. Additional investor information can be accessed at http://www.axt.com or by calling the company's Investor Relations Department at (510) 683-5900.

About AXT, Inc.

AXT designs, develops, manufactures and distributes high-performance compound and single element semiconductor substrates comprising gallium arsenide (GaAs), indium phosphide (InP) and germanium (Ge) through its manufacturing facilities in Beijing, China. In addition, AXT maintains its sales, administration and customer service functions at its headquarters in Fremont, California. The company's substrate products are used primarily in lighting display applications, wireless communications, fiber optic communications and solar cell. Its vertical gradient freeze (VGF) technique for manufacturing semiconductor substrates provides significant benefits over other methods and enabled AXT to become a leading manufacturer of such substrates. AXT has manufacturing facilities in China and invests in joint ventures in China producing raw materials. For more information, see AXT's website at http://www.axt.com.

Safe Harbor Statement

The foregoing paragraphs contain forward-looking statements within the meaning of the Federal Securities laws, including statements regarding our current and long-term growth and trends in the demand for our products, our progress in our strategic plans, and the positioning of the company. These forward-looking statements are based upon specific assumptions that are subject to uncertainties and factors relating to the company's operations and business environment, which could cause actual results of the company to differ materially from those expressed or implied in the forward-looking statements contained in the foregoing discussion. These uncertainties and factors include but are not limited to: overall conditions in the markets in which the company competes; global financial conditions and uncertainties; market acceptance and demand for the company's products; the impact of factory closures or other events causing delays by our customers on the timing of sales of our products; and other factors as set forth in the company's annual report on Form 10-K and other filings made with the Securities and Exchange Commission. Each of these factors is difficult to predict and many are beyond the company's control. The company does not undertake any obligation to update any forward-looking statement, as a result of new information, future events or otherwise.

FINANCIAL TABLES TO FOLLOW

   
AXT, INC.  
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS  
(Unaudited, in thousands, except per share data)  
                         
    Three Months Ended     Twelve Months Ended  
    December 31,     December 31,  
    2012     2011     2012     2011  
                                 
Revenue   $ 18,927     $ 21,219     $ 88,374     $ 104,121  
Cost of revenue     15,243       13,386       63,522       59,339  
Gross profit     3,684       7,833       24,852       44,782  
                                 
Operating expenses:                                
  Selling, general and administrative     3,710       3,851       15,419       14,836  
  Research and development     875       657       3,468       2,473  
    Total operating expenses     4,585       4,508       18,887       17,309  
Income (loss) from operations     (901 )     3,325       5,965       27,473  
Interest income, net     316       190       518       449  
Other income, net     206       253       520       696  
                                 
Income (loss) before provision for income taxes     (379 )     3,768       7,003       28,618  
Provision for income taxes     294       162       853       2,795  
Net income (loss)     (673 )     3,606       6,150       25,823  
                                 
Less: Net income attributable to noncontrolling interest     (83 )     (1,040 )     (3,040 )     (5,503 )
Net income (loss) attributable to AXT, Inc.   $ (756 )   $ 2,566     $ 3,110     $ 20,320  
                                 
Net income (loss) attributable to AXT, Inc. per common share:                                
  Basic   $ (0.02 )   $ 0.08     $ 0.09     $ 0.63  
  Diluted   $ (0.02 )   $ 0.08     $ 0.09     $ 0.61  
                                 
Weighted average number of common shares outstanding:                                
  Basic     32,220       31,992       32,144       31,872  
  Diluted     32,220       32,822       32,865       33,061  
                                 
                                 
                                 
      - more -                          
   
   
   
AXT, INC.  
CONDENSED CONSOLIDATED BALANCE SHEETS  
(Unaudited, in thousands)  
             
    December 31,     December 31,  
    2012     2011  
Assets:                
Current assets                
  Cash and cash equivalents   $ 30,634     $ 26,156  
  Short-term investments     10,270       5,505  
  Accounts receivable, net     17,912       17,966  
  Inventories     40,352       46,012  
  Related party notes receivable - current     2,036       412  
  Prepaid expenses and other current assets     5,268       7,052  
    Total current assets     106,472       103,103  
                 
Long-term investments     9,191       8,981  
Property, plant and equipment, net     37,235       34,282  
Related party notes receivable - long-term     416       2,021  
Other assets     14,275       14,101  
                 
    Total assets   $ 167,589     $ 162,488  
                 
Liabilities and stockholders' equity:                
Current liabilities                
  Accounts payable   $ 5,894     $ 3,286  
  Accrued liabilities     7,202       7,597  
    Total current liabilities     13,096       10,883  
                 
Long-term portion of royalty payments     3,325       4,125  
Other long-term liabilities     254       431  
    Total liabilities     16,675       15,439  
                 
Stockholders' equity:                
  Preferred stock     3,532       3,532  
  Common stock     32       32  
  Additional paid-in capital     193,063       191,554  
  Accumulated deficit     (59,047 )     (62,157 )
  Accumulated other comprehensive income     6,033       5,818  
    Total AXT, Inc. stockholders' equity     143,613       138,779  
                 
  Noncontrolling interest     7,301       8,270  
    Total stockholders' equity     150,914       147,049  
                   
    Total liabilities and stockholders' equity   $ 167,589     $ 162,488  

Contact Information

  • Contacts:
    Raymond A. Low
    Chief Financial Officer
    (510) 683-5900

    Leslie Green
    Green Communications Consulting, LLC
    (650) 312-9060